Are you debt averse or want to take on more debt?

You are required to file a complete and accurate return, which means reporting the income that you earned along with atleast the direct expenses that you incurred on your rental.There are two comflicting forces - Your tax accountant wants to be aggressive with deductions because it will entitle you to paying less taxes(now or in the future).Your lender wants to see as much income as that will increase your Debt to Income Ratio(DTI).The good thing is that you can speak with your lender about 'one time expenses', that were only incurred in that year and are not reoccuring. 

Quote from @Tim Johnson: Has anyone seen an example of a lender combining debt with equity on a real estate deal?

Thus, your profit margin is lower (than the all-cash offer), but your ROI is higher.Putting more than 20% down might reduce your monthly payment and debt-to-income ratio, but it also ties up more of your capital, limiting flexibility.

I always tell my clients to put a reminder on their phone to go off monthly to ensure they pay off all debts like this that can cause them to have higher credit scores. 

Same guy handled a triplex rehab (the one with the theft), and that's where he took money that he simply pocketed or used in some sort of Ponzo scheme to pay off other debts (I have no way to know, but the money did not go to contractors or to continue work at the site).

You will be able to take advantage of it in a SDIRA if the syndication also has taken on debt and therefore passes UDFI on to your account. 

As a generic advice:  I would recommend paying off any credit card debt, or high loans. 

It really comes down to your comfort level with debt and your long-term strategy.

If you don't have a good foundation(bad debt paid off, $$ saved up) I would first focus on that.